SBI suggests RBI as single regulator for all home loans

The State Bank of India is of the view that Reserve Bank of India should be the regulator for all home loans sanctioned by banks and housing finance companies. A single regulator would help remove the regulatory arbitrage that existed between banks and HFCs.

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SBI suggests RBI as single regulator for all home loans

The State Bank of India is of the view that Reserve Bank of India should be the regulator for all home loans sanctioned by banks and housing finance companies. A single regulator would help remove the regulatory arbitrage that existed between banks and HFCs.

Banks currently accounted for more than two-thirds of total home loans disbursed in the country. A single regulator having the same rules for all players would help remove the regulatory arbitrage that existed between banks and HFCs, he said.

Currently RBI regulated home loans provided by all commercial banks, while housing finance companies like HDFC Ltd, LIC Housing Finance Co Ltd, also offered home loans which were regulated by the National Housing Bank. RBI had raised objections to SBI's dual rate policy on housing loan which was tagged as teaser loans introduced some time ago.

"If a bank offers a slightly lower rate in the initial years and higher rate in later years it is called a teaser loan and they are required to make provision but could similar rules not be applied for other players in the home loan market?" Chauduri said.

Meanwhile, SBI has urged upon RBI to reduce the minimum tenure of deposits to three days from seven days for inducing more flexibility of consumers. "These are not issues that will lead to inflation or bring imbalances in financial stability, but induce flexibility to the depositor," Chaudhuri said. "Now we have shadow banking offering investors investment for even one day," he said. The liquidity risk was not very different from aseven-day deposit and three day deposit, but the question was why make banks handicapped," he asked.

SBI stock price

On March 31, 2015, State Bank of India closed at Rs 267.00, down Rs 0.9, or 0.34 percent. The 52-week high of the share was Rs 335.90 and the 52-week low was Rs 186.74.

The company's trailing 12-month (TTM) EPS was at Rs 16.61 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 16.07. The latest book value of the company is Rs 158.43 per share. At current value, the price-to-book value of the company is 1.69.